(Inserts dropped characterisation of Honenu in sixth paragraph)
* Three Jews, two of them minors, confessed - officials
* Lawyers may contest charges, cite suspect's mental health
By Dan Williams
JERUSALEM, July 14 (Reuters) - Three Israeli Jews arrested for the murder of a Palestinian teenager have confessed to abducting him and burning him alive, officials said on Monday, an incident that helped trigger a week of Israeli-Hamas fighting around the Gaza strip.
Easing a court gag order on the case, Israel said the suspects, two of them minors, had told interrogators that in killing Mohammed Abu Khudair they sought revenge for the murder of three Jewish seminary students in the occupied West Bank last month.
The names of the suspects, remanded by an Israeli court pending a formal indictment, were not immediately given.
Tensions escalated around the two incidents. More than 166 Palestinians, most of them civilians, have been killed by Israeli action against Gaza, run by the militant Hamas group. Hundreds of rockets have been fired from Gaza into Israel.
The adult suspect facing the gravest allegations might plead mitigation in citing past mental illness.
"I expect soon to get the investigative material, in which I will look for support for the assessment there is a complex problem in the matter of of my client's criminal culpability," an attorney for Honenu, an ultranationalist legal aid organisation, said.
According to Israel's Shin Bet security agency, in the early hours of July 2, as Muslims marked the end of the daylight Ramadan fast, the three suspects "patrolled Arab neighbourhoods of Jerusalem for a number of hours, in an attempt to find a victim to abduct, until they spotted Mohammed Abu Khudair".
Bundling him into their car, they drove to a forest outside the city where the 29-year-old suspect beat him on the head with a tyre iron (wheel brace) and, helped by the two 17-year-olds, doused him with fuel and lit it, the Shin Bet said.
Israeli prime Minister Benjamin Netanyahu, who had blamed Hamas for the killing of the Jewish youths and launched a crackdown against the Palestinian Islamist group, deplored Abu Khudair's murder as "loathsome". He ordered police to find the culprits swiftly and pledged to see them prosecuted to the full. (Writing by Dan Williams; editing by Ralph Boulton)